Uganda Approves Shs84.3 Trillion Budget as Debt Servicing Dominates Spending Plan

Mintesinot Niggusie

Uganda’s parliament has approved a Shs84.3 trillion national budget for the 2026/2027 financial year, with debt servicing emerging as the single largest expenditure item amid rising fiscal pressures.

The budget, passed during a sitting chaired by Speaker Anita Among on Friday, April 24, 2026, was adopted alongside the Appropriation Bill and the Budget Committee report, which outlines funding sources and spending priorities.

State Minister for Finance Henry Musasizi told parliament the budget will be financed through domestic revenue of Shs44.18 trillion, representing more than half of total resources. Other financing sources include domestic borrowing of Shs11.97 trillion, external project support of Shs11.27 trillion, domestic refinancing of Shs13.97 trillion, petroleum revenues of Shs1.44 trillion, budget support grants of Shs1.22 trillion and local government revenues of Shs339 billion.

Of the approved expenditure, Shs47.16 trillion has been classified as discretionary spending, while Shs37.23 trillion is statutory, covering debt obligations, wages and pensions.

Deputy Budget Committee Chairperson Remigio Achia said debt pressures continue to weigh heavily on fiscal space. Debt servicing is projected at about Shs33.4 trillion, absorbing nearly 40 percent of the total budget, with interest payments estimated at Shs12.4 trillion, largely driven by domestic borrowing.

He said the spending framework prioritises production and household incomes across key sectors.

Agriculture and agro-industrialisation received Shs2.2 trillion for research, irrigation, inputs and market access. Tourism was allocated Shs571.5 billion, while mineral-based industrial development, including oil and gas, received Shs435.5 billion.

Science, technology and innovation, including ICT and digital government services, was allocated Shs1.1 trillion. Wealth creation programmes under the Parish Development Model and related initiatives were allocated Shs2.5 trillion.

The security sector received Shs10.2 trillion, while human capital development took the largest share at Shs13.5 trillion, including a phased 25 percent salary increase for teachers and Shs496.3 billion for preparations for AFCON 2027.

Infrastructure development was allocated Shs10.8 trillion for roads, rail, energy and transport systems. Manufacturing received Shs1.04 trillion, and environmental protection was allocated Shs514 billion.

Additional allocations include Shs664.3 billion for road completion works, Shs100 billion for medicines and health supplies, Shs20 billion for export promotion and Shs20 billion for ambulances.

However, the budget drew criticism from members of parliament over late adjustments and spending priorities.

Kira Municipality MP Ssemujju Nganda opposed last-minute changes, saying they increased the budget by Shs997 billion and reallocated Shs862 billion without clear procurement or recruitment plans. He warned that four expenditure categories, including debt servicing, wages, administrative costs and classified spending, account for about 70 percent of total expenditure.

He also questioned allocations linked to reparations for the Democratic Republic of Congo worth Shs260.4 billion.

Other lawmakers raised concerns over sectoral priorities, including health funding for sickle cell disease, infrastructure delivery clarity, and reductions in allocations for institutions such as Bunyoro University.

The Leader of the Opposition Joel Ssenyonyi criticised continued funding for the International Specialised Hospital Lubowa, questioning its progress despite repeated allocations. The government said the facility is about 75 percent complete and pledged to provide a detailed update within two weeks.

Speaker Anita Among urged caution on borrowing practices, while the ICT minister defended government borrowing, saying it remains standard practice when properly managed and repaid.

The budget now sets the framework for Uganda’s fiscal year, with debt servicing and public wage obligations continuing to shape spending priorities.